Labor on the endangered species list

NSW Labor is set for a historic defeat this weekend, but beyond the inevitability of an ALP shellacking lies the bigger question of whether the party itself has entered a period of long-term decline like other social democratic forces worldwide.

In Carr’s analysis, Labor in NSW would expect to be facing a “pendulum swing’’ election after 16 years in power, but a series of ministerial scandals, the disastrous mishandling of the sale of electricity assets and a dearth of talent in the parliamentary party have transformed a normal sort of defeat into a catastrophic one.

“It’s an open question whether it’s so bad it raises doubts about the party’s viability,’’ Carr tells The Australian Financial Review.“It depends how many seats – this is a new factor in the equation – how many seats the Green party picks up.

“Do they pick up more than a few in the inner-city? If they do, it would tend to suggest that Labor in the future may only be able to govern in NSW in coalition with the Greens: in other words, the stuff of party realignment.’’

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Carr is talking here about state politics, but threats to Labor cannot necessarily be quarantined. The phrase “party realignment’’ is one that is heard increasingly in panicky federal Labor circles these days.

Labor faces its biggest challenge in a generation or more to avoid the fate of its fellow social democrats globally under siege from left and right and the political realignments that are turning European politics on its head.

Centre-left parties in South Korea and Japan have also fallen victim recently to a treacherous political environment that is proving unfriendly to progressive forces worldwide.

In a series of interviews with Labor figures inside and outside the parliamentary party since a review of Labor’s 2010 election performance was released and on the eve of a devastating defeat in its heartland, a picture emerges of a party anxious about its destiny and concerned about its leadership.

What is not in dispute is that Labor’s defeat in NSW will establish lows for a party that has dominated state politics since World War II, with a Right faction that has guided federal Labor since the days of Gough Whitlam.

“We’re going to get flogged. We’re going to lose very, very badly,’’ says Sam Dastyari, NSW general secretary and the man who has been handed responsibility for managing not simply the party’s electoral decline, but its implosion. “This is the political reality. No one is in denial.’’

Few involved in the ALP nationally will mourn the death of NSW Labor electorally.

Paul Howes
, the general secretary of the Australian Workers Union, author of the recently published Confessions of a Faceless Man and one of the instigators of the putsch against
Kevin Rudd,
leaves no doubt that NSW Labor’s demise will be a relief.

“This is not just a government that has lost its way. It’s a party which has completely imploded upon itself,’’ Howes tells the Financial Review.

Mark Arbib
, the Housing Minister, former general secretary of NSW Labor and a leader of the cohort involved in disposing of Rudd, dismisses talk of Labor’s defeat in NSW contaminating the party federally.

“There’ll be a lot of people who will talk about doom and gloom," Arbib says. “That’s rubbish."

Arbib also defends himself against criticism across the party over his role in deposing Rudd. “In any drama, there’s always a villain,’’ he tells me. “We made the hard calls, we made the hard decisions that had to be made.’’

Arbib, with his youthful intensity and shaven head, is a ready-made villain – if you’re looking for one.

Karl Bitar
, the outgoing national secretary of the Labor Party and another “faceless man’’ involved in Rudd’s removal, dismisses talk of Labor’s demise as “overblown’’.

“This stuff is very cyclical,’’ Bitar tells the Financial Review.

Howes, Arbib, Bitar and prominent figures from the NSW Right in the federal parliamentary party, including Minister for Immigration
Chris Bowen
and Sustainability Minister
Tony Burke
, all insist that NSW can be quarantined from federal Labor.

Bowen, who is spoken of as a future leader of the party, believes that Labor will weather the NSW poll, and its aftermath will enable what he describes as “a process of rebuilding’’.

Rodney Cavalier, a former NSW education minister and author of Power Crisis: The Self-Destruction of a State Labor Party, in which he dissects reasons for Labor’s demise in his home state, believes his Labor colleagues are in denial about the extent to which the party is facing a threat to its existence.

“Labor governments [state and federal] travel the galaxies aboard a spaceship. Their opinions are reinforced by fellow members of the political class, and there’s very little need to return to earth,’’ he tells the Financial Review. “The problem is the electorate is not on board that spaceship, nor are members of the Labor Party."

What cannot be overlooked is the overall political environment federally in which doubts about the Gillard experiment are seeping into the Labor caucus.

Gillard’s colleagues are predisposed to give her the benefit of the doubt, but anxiety is spreading in caucus and among frontbenchers in particular, who have looked askance on an inept carbon tax announcement, devoid of detail, that has enabled Opposition Leader
Tony Abbott
to define the debate in a way that is proving extremely damaging.

“Personally, I’m in despair,’’ says one of Gillard’s senior colleagues.

Doubts are held about her new staff appointments, including chief of staff
Ben Hubbard
and adviser Nick Reece, fresh from presiding, as state secretary and campaign manager, over the defeat of the Brumby government in Victoria.

Reservations about
Julia Gillard
and
Wayne Swan
’s abilities to manage a many-front war, including trying to sell a carbon tax and other reforms at the same time, not to mention framing a difficult budget in circumstances that are hardly propitious, are being suppressed for the moment by a party that knows it cannot afford further leadership tremors.

Whatever the polls might be saying, there is zero appetite for turning back to Rudd, who is disparaged across the Labor caucus.

All this Sturm und Drang is taking place against the background of crumpling support for Labor across the country. The party’s primary vote is sliding federally, and in most, if not all, state jurisdictions, according to the polls.

Labor officials have, as an article of faith, the belief that any primary number without a “4" in front of it spells danger for the party. The accompanying chart illustrates the point that when Labor dips below 40 per cent in its primary vote, it loses emphatically.

Ben Chifley’s primary vote of 45.98 per cent in the bank nationalisation election of 1949 was insufficient to save him from defeat by Robert Menzies, but that number exposes another worrying development for Labor.

In 1949, class loyalties based on high levels of union representation in the workforce meant that Labor’s base support was relatively stable. This position has completely eroded as the percentage of unionists Australia-wide has diminished and “rusted on’’ support for Labor has “rusted off’’.

Labor is battling to preserve a “3’’ in front of its primary vote, let alone a “4’’, and risks falling into the “20s" which would presage a wipeout much worse than the Calwell, Whitlam and Keating defeats.

John Black, a former ALP senator now head of Australian Development Strategies, a demographic profiling company, puts the party’s predicament into relief in this assessment of its voter profile.

“Instead of the skilled blue-collar tradesmen and academics from the 1970s, the ALP profile for the new millennium is people on transfer [welfare] payments to Centrelink, mums, students, the unemployed, or those living in welfare housing,’’ he notes in an assessment of Labor’s 2010 election performance.

This is not a demographic on which to construct the solid foundations of a sustainable political party.

Both Nielsen in the Fairfax press and Morgan research recorded Labor’s primary vote federally in the low 30s in latest polling, and in the states the situation is worse. On the eve of the NSW election, Newspoll has Labor at 26 per cent, in Queensland
Anna Bligh
’s government is polling in the 30s, and in both South Australia and Western Australia, the situation is not much better.

In WA, Labor is struggling; in SA, Premier
Mike Rann
is facing open revolt from factions of the Right and Left over his attempts to impose budgetary cost savings.

In Queensland, Bligh may have emerged as a heroine of the floods, but voters are awaiting the opportunity to bludgeon her government.

Scarcely in the party’s history, going back to its formation during waves of industrial unrest in 1891, has it faced a greater threat that may in some ways be more challenging than the Whitlam government’s implosion in 1975, or the great ideological schism of the 1950s that spawned the Democratic Labor Party.

One of Labor’s most senior and historically literate figures describes the situation as “dire’’ unless remedial action is taken to democratise the party and in the process reconstitute its shrinking base lest it become simply a “shell’’ for the ambitions of a managerial class.

“The consequences long-term of not acting are our demise,’’ he tells the Financial Review. “Go and read the history of the British Liberals.

“For the first time in our history, we have a viable entity taking votes on our left-wing flank. This is very different from what Labor has faced before. It has always had the challenge of fighting the forces of the right. Now, it’s like we’re in a political squeeze play.

“This means our capacity to form majority governments in the long term is very much in question.’’

On the other hand, Labor hardheads like to remind reporters predisposed to write down the party’s prospects that the Howard government ruled in Canberra while a ragged Coalition was out of power in all states and territories.

This is true, but
John Howard
was not facing the sort of realignment on the conservative side of politics that now afflicts parties of the centre-left under siege from the Greens on the left and anti-immigrant, working-class forces on the right.

Anthony Albanese
, manager of government business in the House of Representatives and a leader of Labor’s Left faction, acknowledges the challenges facing all social democratic parties in a world gripped by an information revolution. This is leading to a fragmentation of voting behaviour that is being reinforced by the proliferation of social media and a bewildering whirlpool of information and disinformation that is proving difficult, if not impossible, for Labor to counteract.

“Australian politics these days is not just a two-horse race," Albanese tells the Financial Review. “It is not simply Gillard versus Abbott. What we have is a complex array of forces to deal with.’’

Labor is grappling with the “Americanisation’’ of Australia’s political discourse in which a “fair and balanced’’ Fox News-type network (Sky News) is in collaboration with the Murdoch press in setting the political agenda, much of it negative for the centre-left of politics.

Predominantly right-wing radio talk show hosts feed off this phenomenon, creating an echo-chamber effect that drowns out efforts to purvey a message. The bad news for Labor is that competition – in which conservative views on radio sell as opposed to liberal views – means that a conservative drumbeat will intensify, not diminish.

Read the transcripts of Abbott’s interview on radio around the country (his preferred means of communication) and you would get the impression that the Coalition is paying for air-time, such is the banality of most of the questioning.

Albanese’s analysis of multiple challenges faced by political parties across the spectrum is valid, but Labor’s predicament is clearly out of the ordinary, and cannot simply be explained by the ebb and flow of politics, or by a voracious 24-hour news cycle.

Labor’s difficulties in dealing with a complex political environment were reflected in the report on what went wrong in 2010 prepared by Carr and his fellow “wise men’’, former Senate leader
John Faulkner
and former Victorian premier
Steve Bracks
. They presented their report – identifying dwindling grassroots participation as a principal concern – to Labor’s national executive in February, an abridged version of which has been released for public discussion.

The national executive – Labor’s peak body between national conferences – will meet in April to consider recommendations to increase rank-and-file participation, including proposals for “US-style primaries’’ for pre-selection in open seats in which there is no sitting member.

But there is little appetite for far-reaching reform within a party exhausted by the hyper-kinetic Rudd years.

“I’m not sure there’s the energy to implement these reforms,’’ says a senior Labor figure knowledgeable about processes surrounding the review.

Among recommendations in the “closed’’ section of the report that has been substantially leaked but not released for public discussion, is that Labor must do more to protect its progressive flank on “Greens" issues such as climate change and gay marriage, but this advice is resisted by important mainstream figures in the parliamentary party.

“Even if the Labor Party went completely green, we would still not get more than 42 per cent of the vote and that would not be enough to win,’’ says this individual.

“We could take every green vote and lose every election.’’

Gillard herself has rejected one of the “wise-men’s’’ principal recommendations. This is that the parliamentary Labor Party should revert to the practice of caucus electing a slate of ministers rather than the leader. This rule change under Rudd and proposed by Gillard in opposition is one of the factors blamed for the parliamentary party’s failure to exercise restraint over an out-of-control executive embodied in the narrow decision-making processes of the “gang of four’’ Rudd era.

Labor’s active membership is now down to 37,000 nationally, about 15,000 of whom reside in NSW. Luke Foley, former assistant general secretary of the NSW branch, calculates that in Australia’s most populous state, one-fifth of 1 per cent of working people belong to the Labor Party.

This represents a historic low since the party’s formation more than a century ago. Given social and demographic trends, not to mention a Greens challenge, stabilising membership numbers will not be easy, and may well have to await the arrival of a conservative government, possibly one led by Abbott, who might be expected to galvanise a potential Labor base.

Prominent figures in the Labor movement ask whether participation in the political process matters any more because the party leadership has become so remote from its base. “The Labor Party can die and the government will survive, so totally disconnected have the two become,’’ says Cavalier.

Albanese acknowledges that a shrinking party base leads to a “centralisation of decision making’’ along the lines of German sociologist Robert Michels’ “iron law of oligarchy’’, which holds that all political organisations become less democratic as they become more entrenched.

Asked what the remedy is, Albanese says Labor needs to regenerate, but he concedes this is easier said than done in an environment in which all political organisations have difficulty attracting participation at grassroots level when people no longer regard attending a Labor branch meeting as useful or edifying as they might church attendance in the old days.

In their efforts to explain what is happening, Labor figures search for explanations, from the fall of the Berlin Wall that changed the world as we know it; to the “Washington consensus’’ of the 1980s and ’90s that enshrined neo-liberal economic views; to the decline of trade unions; to the rise of modern marketing techniques; and the “bowling alone" phenomenon in which Harvard political scientist Robert Putnam noted an erosion of civic life.

In other words, the world is a bewildering place for all political organisations, but particularly those committed to a reform agenda that might have been regarded as progressive.

Labor’s moment of discontent has been some years in the making, beginning with the aimless
Kim Beazley
era when the leader’s “small ball’’ and “rollback’’ strategy left it becalmed and culminating in the discordant Rudd prime ministership.

Paul Keating
declined to be interviewed for this series, but he is known to be disappointed over the Rudd years, during which the former prime minister committed himself “rhetorically’’ to a continuation of the micro-economic reforms of the ’80s and ’90s, but in fact did little to stimulate a public appetite for such reforms. Beazley had “walked away’’ from the “pro-growth’’ and “pro-productivity’’ reforms of the Keating era, in the Keating critique.

These have been unsatisfactory years – years of drift in a policy sense, you could say – for Labor despite its legitimate claims to have managed the global financial crisis effectively. Treasurer Wayne Swan would not need reminding politicians get insufficient credit for what they have achieved by a public that is focused on the future and not necessarily the past.

Carr, Faulkner and Bracks found themselves both looking back and forward in an exercise it is reasonable to assume all found salutary. Carr’s analysis is telling, not because he has uncovered a hidden truth, but as a student of history, he connects the dots and contrives a snapshot that should be quite dispiriting for his colleagues.

Carr sees parallels between Australia and Europe, where anti-immigrant parties of the right are on the rise, threatening social democrats across the continent from France to Austria, including what had been regarded as centre-left strongholds in Germany and in Scandinavia.

“The industrial sector of those societies is on the decline,’’ Carr notes. “Industrial workers as a percentage of the overall population are on the decline. So, not unexpectedly, the political parties they established 100 years ago are contracting. It’s happening here.’’

In his observations about the challenges facing Labor, Carr identifies leadership as a critical element in circumstances that would test any leader, including pressures associated with a hyperactive 24-hour news cycle.

“It is very hard,’’ he says. “It requires political leadership now of great finesse. Look at how [Bob] Hawke straddled contradictions. He led a government committed to economic reform but kept the union base stitched up with the accord and he kept the nature conservationistsor green movement in the tent. And Keating in his own way continued that.’’

Faulkner has spoken sparingly in public about Labor’s predicament in remarks associated with the release the “wise men’s’’ review of the 2010 election, but his views both on what ails Labor and what remedies might be applied can be found in an important speech he delivered in October of 2010 when launching Cavalier’s critique of NSW Labor.

In that speech, Faulkner unburdened himself in remarks that have become even more relevant now that Labor finds itself in greater peril, buffeted from left and right and, not to put too fine a point on it, sagging under the weight of its own “contradictions’’ as it seeks to clear away the debris left behind by Rudd’s manic leadership.

Faulkner may not have been addressing the Rudd legacy directly in his Sydney speech, but he certainly put his finger on Labor’s dilemma under its previous frenetic management in which winning each and every news cycle became an end in itself.

“Neither slavish obedience to popular opinion, nor egocentric disdain for it, are political leadership,’’ Faulkner said. “Political leadership is a balancing act, a constant tension between having the courage of conviction and having the capacity for consultation.’’

Rudd may have had the “courage of his convictions’’ – until he didn’t on the greatest moral challenge of our lifetime – but what is indisputable is that he lacked the “capacity for consultation".

Faulkner went on in words that seem even more pointed now following the review into Labor’s failings over which he presided.

“In modern politics, too many of those with conviction lack the courage to defend those convictions unless they coincide with the certainty of electoral victory; while too many have courage in abundance with no conviction to guide it – save their own personal advantage.’’

And: “For the Labor Party, steeling our spine and showing real courage, not just cunning, is the challenge that lies before us. The only institution powerful enough to insist we show this courage and honour the promise made to Labor voters is the Labor Party itself.’’

And finally, in disparagement of a “whatever it takes’’ mentality that permeates Labor thinking at a certain level he said this:

“Amongst all the number counting and opinion polling, amongst all the wizardry of technology and relentlessness of the 24-hour news cycle, we must never forget these simple facts: the tools of politics must never be our masters; those who support us deserve our most courageous efforts. And, ladies and gentlemen, leaders lead.’’